Alberta Real Estate Terms

The language of real estate is not entirely precise. For instance, all of these words mean basically the same thing: Contract, Offer, Agreement, Purchase and Sale Agreement, Purchase and Sale Contract, Purchase Contract, Sale Contract, the “Deal” and other variations thereof. Since I am a Lawyer, I will define what I believe to be the most appropriate term and reference the other names to it. For this example, Stewart Law Group uses the word “Contract”.

Second, if you see a capitalized word in one of these terms, it generally means the word is defined within these Real Estate Terms.

Third, if you have any comments, additions, corrections or requests respecting these Terms, please forward them to Stewart Law Group via email.

Adjustments – are the adjustment of the operating costs of a Property such as Property Taxes, Utilities and Condo Fees based on the Completion Date. See Statement of Adjustments

Adjustment Date – is the date that various operating costs like Property Taxes, Utilities & Condo Fees respecting the Property are adjusted between the Buyer and Seller. For instance, assume a Contract has an Adjustment Date of April 1 and Property Taxes are paid on the Calendar Year. This means the Seller is responsible for the Property Taxes from January 1 to and including March 31. However, Property Taxes are generally not due until the middle of the year, so they are adjusted on the Statement of Adjustments by giving the Buyer a Credit for the Seller’s share of the Property Taxes.

Amortization – is the length of time it would take you to repay the Principal Amount to the Lender at the same Interest Rate if you made the same Monthly Payment. Most Mortgages have an Amortization of 15 to 25 years.

Appraiser – is the person who performs an independent evaluation of the Property to determine its current Market Value and then prepares a report of the results called an Appraisal. The Appraisal is used by the Lender to determine how much they will loan to the Buyer to purchase the Property. Generally a Lender will loan up to 75% of the Market Value of the Property.

Bill of Sale – is a document used to transfer Chattels from the Seller to the Buyer. Normally, a Bill of Sale is not used in a Real Estate Transaction. The Chattels that are purchased are deemed to be transferred with the Property.

Buyer – is the person or persons who have agreed to purchase the Property from the Seller. Generally the Buyer is a single person or couple, however Corporations and other legal entities can purchase Property as well.

Buyer’s Lawyer – is the lawyer retained by the Buyer to represent the Buyer and do all that is necessary to ensure that the terms of the Contract are implemented and that the Title to the Property is ultimately registered in the name of the Buyer.

Buyer’s Mortgage – is the new mortgage financing obtained by the Buyer from a Lender to help the Buyer pay the Purchase Price and is prepared by the Buyer’s Lawyer and registered against the Title to the Property.

Buyer’s Real Estate Company – is the real estate company that the Buyer’s Realtor works for.

Buyer’s Realtor – is the realtor, acting for the Buyer to find a Property and advise the Buyer on the purchase of a Property and to prepare the Offer to Purchase.

Calendar Year – is the time period from January 1 to December 31 of each year. Most Municipalities deal with Property Taxes based on the Calendar Year.

Cash Shortfall – is the amount of cash needed by the Buyer to purchase the Property. The Cash Shortfall is generally paid by way of a Bank Draft to the Buyer’s Lawyer and is in the approximate amount of the Purchase Price less the Mortgage Proceeds. See Cash Shortfall Calculator.

Cash Shortfall Date – is the date that the Buyer’s Lawyer needs the Cash Shortfall in order to ensure that the transaction completes on time. This is a function of how many days behind the Land Title Office is and may mean you need to obtain Bridge Financing if you are buying and selling at the same time.

Cash to Close – is the amount of money, agreed to between the Buyer and Seller, handled by the Buyer’s Lawyer and Seller’s Lawyer, that must be delivered by the Buyer’s Lawyer to the Seller’s Lawyer to complete the purchase of the Property. Please see the sample “Statement of Adjustments”. From the Cash to Close, the Seller’s Lawyer will payout the obligations of the Seller, like the amount owed by the Seller on any Mortgage registered on Title, the balance due by the Seller respecting the Seller’s Realtors Commission, pay the Statement of Account of the Seller’s Lawyer and give the balance to the Seller. See Seller’s Cash Calculator.

Cash Closing – is used when a Normal Closing won’t work and the Buyer is using all cash to purchase the Property and not obtaining a Mortgage OR is using cash and Mortgage proceeds. In this instance all of the Cash to Close is delivered to the Sellers Lawyer. Upon the Closing Date, the Buyer will get possession of the Property even if the Registration Date is after the Closing Date. See Cash Closing Diagram

Caveat – is a means recognized by the Land Title Office to register certain interests against the Title. For instance, a lease may be registered by way of Caveat. The Buyer’s Lawyer will review the Title and order copies of the Caveats that will remain on Title and discuss them with the Buyer to determine whether they are acceptable Charges.

Charges– mean all of the liens and encumbrances registered against the Title such as Caveats, Easements, Leases and Mortgage.

Chattels – are items in a house such as a fridge, stove, dishwasher or hot tub and are know in law as personal property.

Clearance Certificate – is a certificate issued by the Federal Government of Canada indicating that the income tax obligations of a Non-resident Seller respecting the Property have been satisfied and that it is now appropriate to release the funds held by the Sellers Lawyer to the Sellers. Generally 25% of the Purchase Price is withheld from the Seller until the Clearance Certificate is received.

Closing – is a term referring to how a Real Estate Transaction is going to be completed. There are basically four kinds of Closings being a Normal Closing, a Cash Closing, a Title Insurance Closing or a Protocol Closing.Closing Date – is the date when the transaction is supposed to complete by registration of the Transfer of Land at the Land Title Office and is, to most people, the date when the Buyer gets possession of the Property.

Commission – is an amount of money the Seller agrees to pay to the Selling Realtor set out in the Listing Agreement based upon a successful sale of the Property.

Compliance Certificate – is a certificate issued by the Town of Canmore indicating that the Property is in compliance with the Municipal bylaws. It is generally the Seller’s obligation to supply the Buyer with a Real Property Report with a Compliance Certificate endorsed thereon.

Conditional Offer – is an Offer to Purchase that has a Subject To Clause in it.

Condo Bylaws – are basically the rules and regulations between the Condominium Corporation and the owners of the Condo which set out what you can and can’t do and how the Condominium Corporation is financed, operated and governed. For instance, the Condo Bylaws may indicate that no pets are allowed.

Condo Documents – are the various documents a Buyer should understand respecting the purchase of a Condo and include such items as the Condo Bylaws and budget.

Condo Fees – are a monthly amount that each Condominium owner pays to the Condominium Corporation, generally based on the value of your unit, which are used by the Condominium Corporation for such things as snow clearing, building insurance, grounds maintenance and reserve fund.

Condominium(“Condo”) – is a form of home ownership where there are a number of separate dwelling units contained in one building. The Buyer owns the interior of their Condo and share other property such as the driveways, hallways and landscaping communally with the other owners.

Contract – is the written agreement between the Buyer and Seller respecting the terms and conditions of the sale of the Property. In the Canmore area, there has been developed a standard form for this agreement. The Contract is said to be “Conditional” if there are still conditions which either the Buyer or Seller need to complete and is said to be “Firm” when all of the conditions of the Contract are satisfied.

Conveyance – is a term to describe the whole process whereby a Property is transferred from a Seller to the Buyer.

Counter Offer – is a rejection of the current Offer and the making of a new offer by the Seller or the Buyer respecting a term of the Offer to Purchase.

Deposit – is a sum or sums of money that the Buyer deposits with the Listing Real Estate Company which is the Buyer’s consideration for the transaction and shows good faith and intent to proceed. Deposit amounts vary.

Easement – is a charge on the Lot which allows some third party rights on, over or under the Lot. For instance, if there is a waterline easement along the front of the Lot, this would allow the water company access to your Lot, the right to dig up, repair and replace the water line and for it to remain on your Lot. The terms of the easement, the obligations of easement holder to you and vice versa are set out in the easement document and must be reviewed.

First Loss Payable – is a Property Insurance term used when the Buyer has granted a Mortgage to a Lender and means that if there is every any insurance proceeds payable by the insurance company to the Buyer, then the funds go to the Lender first.

Fixture – is anything that is so affixed to the House or Condo that it has lost its character as a Chattel and is now considered part of the House or Condo.

GST – is an abbreviation for Goods and Services Tax, which is a tax imposed by the Federal Government of Canada, and is currently 6% of the Purchase Price and is changing to 5% on January 1, 2008. The GST is normally not applicable to the purchase of used Property and is generally applicable to the purchase of new property. The GST is collected by the Buyer’s Lawyer from the Buyer and remitted to the Seller’s Lawyer who pays the GST to the Seller who has an obligation to forward the GST to the Federal Government of Canada

Home Inspector – is a person who inspects the House to determine if it is structurally sound and in need of any repairs. The Home Inspector prepares a Home Inspection Report which is used by both the Buyer and the Lender. It is not uncommon to have a Contract “Subject To” a Home Inspection satisfactory to the Buyer”.

Insurance Agent – is the person who arranges Property Insurance for the Buyer for the Property.

Insurance Company – is a business which sells Property Insurance to a Buyer to protect the Buyer should something like a fire happen to the House.

Interest Adjustment Date – is the date in the Mortgage upon which interest will commence to be owed by the Buyer and earned by the Lender. Interest will also be owed by the Buyer to the Lender for the period of time from Mortgage Funds Advance Date to the Interest Adjustment Date. This interest is generally deducted from the Buyer’s bank account. Normally Mortgage Payments are due on the first day of the month. If the Lender advances the Mortgage Funds on say the 16th day of the month, then the Lender will need to collect its interest for the period between the 16th of the month and the end of the month, say in this case for 14 days.

Interest – is the cost to you to borrow the Principal Amount from the Lender.

Interest on Cash to Close – is interest payable by the Buyer to the Seller because the Cash to Close was not paid or releasable to the Seller on the Closing Date.. The amount of interest payable is based on the number of day interest is required and the Cash to Close. The interest rate on the Cash to Close depends upon who caused the delay, ie. the Buyer or the Seller.

Interest Rate – is the annual cost of borrowing the Principal Amount expressed as a percentage. For instance, the Interest Rate of your Mortgage could be 6%. If the Principal Amount is $100,000, then you would be paying $6,000 in interest annually to the Lender, likely in monthly payments of $500 per month respecting interest as well as an amount towards the Principal.

Joint Tenants or Joint Tenancy – is one way two or more people can register the Title to a Property into their names. If the Property is held as “Joint Tenants”, then when one of the Joint Tenants dies, his interest in the Property automatically is transferred to the remaining Joint Tenant(s). This is a common means for a couple to own Property so that when one of them dies, the deceased’s interest in the Property goes to the remaining person. The alternative to Joint Tenancy is Tenants in Common.

Land Surveyor – is a person who goes to the Lot and accurately determines the dimensions of the Lot and the location of the House and other structures on the Lot and then prepares a Real Property Report which is used by the Buyer and the Lender.

Land Title Office – is an Alberta Government agency where all titles and charges affecting land in Alberta are registered.

Legal – is a short hand way to refer to the Legal Description. For instance, between the people involved in a Real Estate Transaction, they may say, “What’s the Legal of the Property?”

Lease – is a contract between the Registered Owner of the Property (Lessor) and someone else (Lessee) whereby the Lessor allows the Lessee to use the Property according to the terms of the Lease Contract.

Legal Description – is the unique description of the Lot contained on the Title as assigned to the Lot by the Alberta Government. A typical Legal Description for a single detached home is __________ and for a Condominium is __________.

Legal Fees (Real Estate) – is the amount of money paid by the Seller to the Seller’s Lawyer or paid by the Buyer to the Buyer’s Lawyer for the services performed in representing the Buyer or Seller in a Real Estate Transaction. Legal Fees are comprised of the fee, which is the amount the lawyer is charging you to act for you, the disbursements, which are expenses the lawyer has paid on your behalf to others such as search fees, courier charges and registration fees. In addition, GST is payable on the fee and certain disbursements. A Buyer’s Lawyer or Seller’s Lawyer would be pleased to give you a quote for his services before being retained.

Lender – is anyone who loans the Buyer money to purchase a Property and is generally a bank, credit union, secondary lender or can be a private individual or company.

List – means to enter into a Listing Agreement with the Listing Broker.

Listing Agreement – is the contract between the Seller and the Seller’s Real Estate Company setting out what the Seller’s Realtor will do respecting selling the Property and the Commission due upon a successful sale..

Listing Broker – is the real estate company or agency which is in the business of acting for Sellers and Buyers in listing Property for sale and in helping Buyers and Sellers find Property to purchase and sell. The Listing Broker is the real estate company that the Seller’s Realtor works for.

Lot – is the ground upon which the House or Condo sits and is generally rectangular in shape and whose dimensions are set out in a Real Property Report. In law, a Lot is known as real property. Formerly, the owner of the surface owned to the “heights of the sky” and “down to the center of the earth”; you can imagine this ever widening wedge shape that starts as a tiny dot at the center of the earth and rises, every widen as it passes through the boundaries of the Lot and on upward into the sky. From this total package, legislation has removed such things as mineral rights in the ground and restrictions in the air space above the Lot.

Market Value – is the value of the Property as determined by an Appraisal or is the value of the Property as determined by a willing Seller and Buyer operating at arms-lengths.

Maturity Date – is the date in the Mortgage that the Term ends. On this date, the Lender has the right to ask for the balance of Principal Amount and Interest outstanding on the Mortgage. However, this is very rare. Lenders are in the business of loaning money, so if the Lender has had a good experience with you, they will grant you a Renewal Term.

Mortgage – is a financial obligation of the Registered Owner registered on the Title. It is a contract whereby the Lender agrees to loan to the Buyer or Registered Owner the Principal Amount upon certain terms. See also Seller’s Mortgage and Buyer’s Mortgage. To determine your monthly mortgage payment, Click Here

Mortgage Amount-Mortgage Rate – is interest payable by the Buyer to the Seller because the Seller did not receive the Sale Proceeds on the Closing Date. The amount of interest payable is based on the number of day interest is required, the Mortgage Amount and the Mortgage Interest Rate.

Mortgage Broker – is a person who acts for Buyers and helps them to arrange Financing to purchase the Property. Typically a Mortgage Broker will have access to many Lenders and will approach several of them to obtain the necessary financing. There is generally not a fee to the Buyer for this service. See Mortgage Brokers.

Mortgage Documents – are the documents typically required by a Lender and include the Mortgage, Mortgage Terms, Statement of Disclosure amongst others.

Mortgage Funds Advance Date – is the date upon which the Mortgage Proceeds are advanced to the Buyer’s Lawyer. If this date is before the Interest Adjustment Date, then the Buyer will owe some additional interest to the Lender for the period from the Mortgage Funds Advance Date to the Interest Adjustment Date.

Mortgage Insurance – is an insurance fee paid by the Buyer to an Insurance Company like Canada Mortgage and Housing to protect the Lender should the Buyer default on it’s loan obligations and the Lender comes up short after the sale of the Property.

Mortgage Payment – is the amount of each mortgage payment comprised of Interest and Principal as set out in the Mortgage. Unlike rent, which is paid in advance, generally on the first day of the month, Monthly Mortgage Payments are paid, in arrears, meaning at the end of the month. Therefore your first mortgage payment will be one month after the Interest Adjustment Date.

Mortgage Payment Frequency – is the time period between each mortgage payment. For instance, most mortgage payments are made monthly on the first day of the month, however payments can also be made, weekly, bi-weekly, bi-monthly, for instance.

Mortgage Proceeds – is the net amount of funds received by the Buyer’s Lawyer. Say a Buyer arranges a loan of $50,000, however, the Lender requires Mortgage Insurance be obtained and that costs $1,300. This amount will be deducted from the $50,000 loan meaning that the Buyer’s Lawyer will only obtain mortgage proceeds of $48,700 to apply towards the purchase of the Property.

Mortgagee – is the Lender who loans the money to the Buyer.

Mortgagor – is the Buyer who borrows from the Lender and is the person who grants a Mortgage. A way to remember who the Mortgagor is and who the Mortgagee is to remember that the “or” does the act. Therefore a grantor does something and the grantee receives it. A donor gives something and a donee receives it.

Municipality – is a word that describes the legal status of an area. For example, Canmore is a Municipality and is responsible for the governance of the land contained within its boundaries.

Non-Resident Certificate – is a document obtained by the Buyer’s Lawyer, which is executed by the Seller, confirming the residency status of the Seller.

Non-Resident Seller – if a Seller is a non-resident for income tax purposes in Canada, then the Buyer has an obligation with withhold 25% of the Purchase Price from the Seller until the Seller provides the Buyer with a Clearance Certificate issued by the Federal Government of Canada. The Buyer’s Lawyer looks after this issue on behalf of the Buyer. See Non-Resident Seller

Normal Closing – is used when there is sufficient time to complete a Transaction by the Completion Date. The Buyer’s Lawyer forwards the necessary documents to the Land Title Office, they are registered. Once registered, the Buyer is given Possession of the Property, the Sales Proceeds are delivered to the Seller’s Lawyer for delivery to the Seller and the Commission is paid to the Listing Real Estate Office. See Normal Closing Diagram

Offer to Purchase – is an offer to purchase a Property, prepared by the Buyer’s Realtor and presented to the Seller’s Realtor for acceptance, rejection or Counter Offer by the Seller.PAP – is short for Pre Authorized Payment and is a means where by a property owner makes a monthly payment respecting Property Taxes to the municipality.

Plan – is a diagram that shows the dimensions and locations of the Lot lines as filed with the Land Title Office.

Power of Attorney – is a document prepared by a lawyer which authorizes another person (the “attorney”) to sign documents on behalf of the person who made the Power of Attorney. This is useful when a party to a Real Estate Transaction knows they will not be available to sign documents and therefore authorizes someone else to sign on their behalf. The Power of Attorney can be limited in its application or unlimited. For more.

Principal Amount – is the amount of money borrowed by the Buyer from the Lender and is the amount the Mortgage is written for.

Property – is the physical assets being bought pursuant to the Purchase and Sale Agreement. These assets generally include the Lot, the House or Condo and certain specified Chattels.Property Disclosure Statement – is a statement prepared by the Seller answering various questions respecting the Property and usually becomes part of the Contract.Property Insurance – is insurance obtained by the Buyer from an Insurance Company to protect the Buyer from damage or destruction to the House or Condo as well as actions for injury to persons on the Property. This is mandatory for a Buyer who is borrowing from a Lender and granting a Mortgage on the Property.

Property Taxes – are a charge on the Property levied by and payable to the Municipality related to the Market Value of the Property and are billed annually respecting the Calendar Year. Property Taxes are generally payable in early July meaning that you pay one-half of your Property Taxes in arrears and one-half in advance.

Protocol Closing – is a process using the Western Conveyancing Protocol that allows the Buyer to have Possession of the Property, the Seller to receive the Sale Proceeds and the Realtors to receive their Commission BEFORE Title is registered in the name of the Buyer or the Mortgage is registered against the Title. See Protocol Closing Diagram

Protocol Lender – is a lender who as agreed to be bound by the Western Conveyancing Protocol. See Protocol Lenders for a current list.

Purchase Price – is the total cost the Buyer is paying the Seller for the Property set out in the Contract excluding GST, if applicable. The Buyer will be faced with additional costs above the Purchase Price to acquire the Property. See Total Purchase Price

Real Estate – is a general term that applies to all forms of real estate like a House, Condo, apartment block, commercial building, farm, vacant lot or time share; it is all real estate.

Real Estate Transaction – refers to whole process from the moment a Seller enters a Real Estate Office until the Seller has received the Sale Proceeds and the Buyer is the Registered Owner of the Property and all reporting has been done by the Buyer’s Lawyer and Seller’s Lawyer and all Commissions paid. Please see A Typical Real Estate Transaction in Canmore

Real Property Report – is a report prepared by a Land Surveyor which determines the boundaries of the Lot being purchased and the location of the House and other structures and fences within the Lot. If there are problems, the Seller will have to remedy them. It is generally the Seller’s obligation to provide the Buyer with a Real Property Report. See Webpage – Real Property Report

Registration Date – is the date that the Title to the Property is registered into the name of the Buyer. In most instances, this is the same date as the Closing Date, however, sometimes occurs after the Closing Date.

Renewal Term(s) – is the agreed up extension of the Mortgage whereby the Buyer and Lender agree to a new Term and Interest Rate for the Buyer’s use of the Lender’s money.

Sale Price – is the price the Seller has agreed to sell the Property to the Buyer for.

Sale Proceeds – is the net amount of funds that ultimately is given to the Seller after all of the Seller’s costs of the sale have been paid. Typical deductions from the Purchase Price are Commissions, Mortgage Payouts and Legal Fees. Please see the “Sale Proceeds Calculator” to determine your approximate Sale Proceeds.

Seller – is the person or persons or company shown on the Title as the legal owners of the Lot. The Seller’s Realtor will obtain a copy of the Title when contacted by a Seller to ensure the person they are dealing with has the authority to List the Property and to ensure they have the correct Legal.

Seller’s Mortgage – is the financing that the Seller has on the Property and is a debt owed by the Seller to that Lender. The seller’s mortgage must be discharged from Title unless the Buyer has agreed to assume the Seller’s Mortgage. This is handled by Undertakings between the Seller’s Lawyer and Buyer’s Lawyer.

Seller’s Real Estate Company – is the real estate company the Seller’s Realtor works for and with whom the Seller signs a Listing Agreement respecting the PropertySeller’s Realtor – is the realtor, hired by the Seller to market and advise the Seller respecting the sale of the Property.

Selling Realtor – is the realtor who found the Buyer for the Property and is responsible for preparing the Offer to Purchase.Statement of Adjustments – is the statement prepared by the Seller’s Lawyer setting out the various credits that exist between the Buyer and Seller. This statement will indicate the Cash to Close due from the Buyer to the Seller. Please see the sample Statement of Adjustments.Subject To Clause – is a term that indicates that the Offer to Purchase is not Firm and that there are conditions which must be satisfied, either by the Seller, but generally by the Buyer before the Offer to Purchase becomes binding on both the Buyer and Seller. Typical “Subject To” clauses are Subject to Financing, Subject to a Home Inspection, Subject to an Appraisal or Subject to my Lawyer reviewing the Condo Documents.

Subject To a Home Inspection – is typically used when purchasing an older House and the Buyer has some concerns with the condition of the House. Typically in the Contract, it is written so that certain levels of problems with the House will not allow the Buyer to rely on this Subject To and get out of the Contract. As an example, if the problem is less than $1,000, that would be OK. The Buyer must be satisfied with the Home Inspection and remove this Condition.

Subject To an Appraisal – is used by a Buyer, who is not getting a Mortgage, to satisfy themselves that what they are offering for the Property is indeed below or at the Market Value and is used by a Buyer, who is getting a Mortgage, to satisfy the Lender that the amount of money the Buyer wishes to borrow is appropriate to the value of the Property. The Buyer must be satisfied with the Appraisal and remove this Condition.

Subject To Financing – is the most common “Subject To” clause and means that a Lender must approve financing and provide a commitment letter for the Buyer to purchase the Property. The Buyer must be satisfied with the Appraisal and remove this Condition.

Subject To my Lawyer reviewing Condo Documents – indicates that the Buyer of a Condo would like the Buyer’s Lawyer to review the relevant Condo Documents and then provide his opinion to the Buyer as to whether they are reasonable. Assuming they are, the Buyer’s Lawyer will generally provide a written opinion to the Buyer’s Real Estate Company that the Condo Docs are reasonable and advise the Buyer that it is appropriate to remove this condition. Depending on what is involved, the Buyer’s Lawyer may charge an additional fee for this service. The Buyer must be satisfied with the Condo Docs and remove this Condition.

Subject to my Lawyer reviewing the Contract – indicates that the Buyer would like the Buyer’s Lawyer to review the Contact and then provide his opinion to the Buyer as to whether the Contract is acceptable. Assuming it is, the Buyer’s Lawyer will generally provide a written opinion to the Buyer’s Real Estate Company and advise the Buyer that it is appropriate to remove this condition. Depending on what is involved, the Buyer’s Lawyer may charge an additional fee for this service. The Buyer must be satisfied with the Contract and remove this Condition.Tenants in Common – is one way two or more people can register the Title to a Property into their names. If the Property is held as “Tenants in Common”, then when one of the owners dies, his interest in the Property passes according to his Will. This is not a common means for a couple to own Property. The alternative to Tenants in Common is Joint Tenants.Term – is the length of time the Lender has agreed to finance the purchase of the Property and loan the Principal Amount for. A term is typically from 1 to 5 years.

Title – refers to the document obtained from the Land Title Office respecting the Lot which sets out the Registered Owner, Legal Description and Charges registered against the Lot. CLICK HERE to see a Title.

Title Insurance – is insurance which the Buyer usually has to purchase if they are obtaining a Mortgage from a Lender. Title Insurance protects the Lender mainly and for an additional cost, can protect the Buyer. If there is a problem with the Lot or some title defect, the Title Insurance Company will remedy the defect. A typical example would be where a garage encroaches into the adjoining property and is not fully contained within the Lot. The Title Insurance Company would remedy this. Title Insurance costs approximately $150 to protect the Lender and $200 to protect both the Lender and the Buyer.

Title Insurance Closing – is a process using Title Insurance that allows the Buyer to have Possession of the Property, the Seller to receive the Sale Proceeds and the Realtors to receive their Commission BEFORE Title is registered in the name of the Buyer or the Mortgage is registered against the Title. Please see the Title Insurance Closing Diagram

Total Purchase Price – is the total cost to the Buyer to acquire the Property and always includes the Purchase Price and Buyer’s Legal Fees. In addition the Buyer may have to purchase an Appraisal, a Home Inspection Report and Title Insurance as well as any Adjustments. The Buyer may also have to pay GST. The Buyer will pay the total purchase price by way of the Mortgage Proceeds, will pay some of these items directly like the Home Inspection Report and Appraisal and will pay the balance by way of the Balance of Cash to Close.

Transfer Documents – are the documents typically used in a Real Estate Transaction and include the Transfer of Land, Statement of Adjustments, etc.

Transfer of Land – is the document, prepared by the Sellers Lawyer which is executed by the Seller and which is filed at the Land Title Office to effectively transfer the Property from the Seller to the Buyer.

Trust Cheque – is the Buyer’s Lawyer’s cheque made payable to the Seller’s Lawyer for the Cash to Close and is generally delivered to the Seller’s Lawyer or directly deposited to the Seller’s Lawyer’s trust account.

Turnaround Time – is the number of business days the Land Title Office needs to register a Transfer of Land from the time it arrives at the Land Title Office until it is registered. As I write this, the Turnaround Time is 10 days and is predicted to go up to two to three WEEKS during the summer of 2006.

Unconditional Offer – is a term used by Realtors to indicate an offer has been made for the Property and there are no Subject To conditions contained in it. If it is accepted by the Seller, then there will be a Firm Contract.

Undertakings – refers to the promises made between the Seller’s Lawyer and Buyer’s Lawyer. A lawyer cannot breach an undertaking that he gives. They are the foundation which allows a Seller to sign a Transfer of Land without having received the Sale Proceeds, which allow a Lender to advance the Mortgage Proceeds to the Buyer’s Lawyer without the Mortgage being registered on Title in the name of the Buyer and which allow the Buyer to give the Balance to Close to the Buyer’s Lawyer.

Utilities – refers to the Municipal charges for services they provide to the Property such as water, sewer and garbage collection. These items are “adjusted” as of the Closing Date. Utilities can also refer to the services you contract for like gas, hydro and cablevision-internet. These items are generally NOT adjusted and are left to the Seller to cancel these services and for the Buyer to sign up for them.

Waiver of Conditions – is generally a document prepared by the Buyer’s Realtor waiving one or all of the Subject To Clauses. When all of the Subject To Clauses are waived, you have a Firm Contract.

Walk Through – is what happens on that happy day when the Buyer obtains possession of the Property. The Buyer and the Buyer’s Realtor take a “walk through” of the Property to ensure it meets the terms of the Contract.

Western Conveyancing Protocol – is an arrangement between the law societies of western Canada that stands in place of Title Insurance and allows Buyer’s Lawyers and Seller’s Lawyers, who agree to be bound by the Western Conveyancing Protocol to proceed with completing a sale without the Transfer of Land being registered. See Protocol Closing details on the Western Conveyancing Protocol..